Feb. 26 (Bloomberg) -- Citigroup Inc. sold 4.75 billion
Chilean pesos ($10 million) of notes that make payments in U.S.
dollars, the largest offering tied to the currency pair in at
least three years.

The five-year securities, issued Feb. 15, pay higher
returns when the peso strengthens against the dollar, according
to a prospectus filed with the U.S. Securities and Exchange
Commission. The notes yield 5 percent a year in pesos, which are
then converted to dollars at the prevailing rate. The bank
distributed the securities for a 1.75 percent fee.

U.S. investors bought $1.2 million of notes linked to the
South American currency last year in one offering, according to
data compiled by Bloomberg.

Scott Helfman, a spokesman for Citigroup in New York,
declined to comment.

Banks create structured notes by packaging debt with
derivatives to offer customized bets to retail investors while
earning fees and raising money. Derivatives are contracts whose
value is derived from stocks, bonds, commodities and currencies,
or events such as changes in interest rates or the weather.